When, in a desperate attempt last Thursday to head off the push for a royal commission into the financial sector, Treasurer Scott Morrison summonsed the chairmen of the four big banks to test their support for a compensation scheme for bank customers, he unwittingly sparked fresh dialogue between the bank chiefs.

By Tuesday, the four chairmen had hatched a plan to take matters into their own hands, bypass the government's feckless attempts at protecting their industry and actually call for the royal commission that they and the Turnbull government had until then so bitterly opposed.

The following day, when the major metropolitan dailies carried front-page headlines that the parliamentary numbers supported the commission of inquiry, ANZ chairman David Gonski, the Commonwealth Bank's Catherine Livingstone, Westpac's Lindsay Maxsted and National Australia Bank's Ken Henry hooked up via phone.

Over a 24-hour period, the banks' chief executives held separate discussions around the move to push the government into a backflip on a royal commission.

ANZ chairman David Gonski hooked up via phone with the other big bank chairmen on Tuesday. Photo: Daniel Munoz

The individual banks had already set up their war cabinets, they had already booked the biggest law firms in town, corporate advisers and teams of public relations specialists.

By Wednesday evening, there was agreement between all the banks to push the green light to exercise their collective muscle and take matters into their own hands. This was despite the fact that as late as Wednesday, Morrison was still attempting to sell them on a compensation scheme.

As late as Wednesday, Treasurer Scott Morrison, left, was still attempting to sell the banks on a compensation scheme. Photo: Nick Moir

For the banks, while still opposed to any sort of royal commission, one in which the Turnbull government set the rules, parameters and terms of reference was a better outcome than a commission of inquiry that would have input from Labor, Greens and some Nationals.

By Wednesday evening, there was agreement between all the banks to push the green light to exercise their collective muscle and take matters into their own hands.

In a letter to the government, the banks characterised their push for a royal commission as one that would end the political uncertainty that was "hurting the confidence in the financial services system, including in offshore markets, and has diminished the trust and respect of our sector and people. It also risks undermining the critical perception that our banks are unquestionably strong."

"The financial services sector is too important to leave to being a political football," Westpac chief executive Brian Hartzer said in a separate statement.

"The financial services sector is too important to leave to being a political football," Westpac chief executive Brian Hartzer said. Photo: Louie Douvis

The banks also hoped that the numerous inquiries and investigations from the likes of the Productivity Commission and the Australian Competition and Consumer Commission would be superseded by a royal commission. Some of this will be wishful thinking.